Managing the LDC Debt Crisis

Jeffrey D. Sachs

JDS

Jeffrey D. Sachs

Discussants: John Williamson

JW

John Williamson

THE DEBT CRISIS of the developing countries is now entering its fifth year. Since August 1982, when Mexico declared its inability to service its debts, more than forty developing countries have experienced crises in external finance. Several earlier Brookings studies analyzing the debt crisis have focused on the origins of the crisis, the market responses to it, and the relationship of the industrialized nations’ macroeconomic policies to the prospects of the debtor nations. This paper has a different focus: the management of the debt crisis by the creditor governments, especially the United States.